June 6, 2002

Kathmandu: Nepalese contractors have shown strong reservations about Nepal Electricity Authority (NEA)’s bidding criteria for the supply of ariel bundled cable under the rural electrification project and asked the authority to review the provision.

They have said that the technical criterion of the procurement tender is unfavourable to the domestic manufacturers and suppliers. The criterion of the Asian Development Bank (ADB), OPEC Fund and His Majesty’s Government funded Eighth Power Distribution System Reinforcement Project requires the bidding companies to have supplied three times the demanded amount for the last three years to qualify for the bid.

“How can the Nepalese industries meet this criterion?” said one of the cable manufacturers. “This is just impossible. This criterion cannot be met even if the supply record of all the companies is seen collectively, let alone a single company.”

He said this provision was in ‘sharp contrast to the long-standing policy of the ADB to provide 15 per cent cost preference to indigenous industries’ to encourage production of the goods locally.

Nepal Electrical Manufacturer Association (NEMA) has urged the NEA to ‘instruct the concerned authority to recognise the experience of supply of the various low voltage cables as sufficient qualifying criteria for the supply of ABC cables. “It is no plausible reason to stop the Nepalese companies from participation on the flimsy ground that NEA has not been regularly buying the ABC cable from them,” NEMA said.

The Association source said that the technical criterion was in favour of the international companies. “Why should we have industries in Nepal if we are disqualified to bid in the major projects?”

But just a week ahead of the call for the bids, they are still hopeful that the NEA would take up the issue with the ADB. “We have been assured that the Authority would ask the ADB to review the technical criteria in favour of the domestic companies.” The ADB is the major partner in the $ 94.5 million project to be completed by 2004, with $ 50 million loan investment. The investment of the OPEC Fund amounts to $ 10 million. The remaining investment is to come from the government.